Why You Shouldn't Buy a Home Directly from a Listing Agent

Why You Shouldn't Buy a Home from a Listing Agent

When buying a home is on your mind, you start to see houses for sale everywhere – online, offline, and on your daily commute. Sometimes, you’ll just be out for a walk and come across an Open House. Maybe you stop in to take a quick peek inside. Or perhaps you book a showing after seeing captivating online photos. In either case, if the listing agent has done their job, the home will be beautifully presented and staged to make you instantly fall in love.

You know you should do your due diligence, but what if you miss out on the perfect home because you hesitated? You start talking to the friendly and helpful listing agent, and you’re hooked! You may even feel compelled to make your offer right this very second. It’s a situation I’ve seen and heard countless times before. What is the harm in working directly with a listing agent?

In many cases, there isn’t any. This is in no way meant to be a fear-mongering post. You can find and buy a house and possibly get a fair deal with a listing agent. Still, it pays to know what could happen if you’re not one of those lucky buyers who enjoys a great experience. In this post, we’ll explore just a few worst-case outcomes that can and do happen occasionally.

Buying a house in the GTA is a significant and rewarding investment that you don’t want to leave to chance. My Buyer’s Guide will help you know what to expect at every step. Download your copy for free right here.

You Don’t Have Representation

Expert guidance is essential when searching for a house, especially if you’re a new or inexperienced buyer. Without an agent, you’ll have to figure out everything all on your own, and very few people know what to look for and what to avoid in a house. That said, representation is even more critical than guidance alone.

Under Ontario’s new TRESA (Trust in Real Estate Services Act), a real estate agent has a fiduciary duty to always act in a client’s best interest. When you work directly with a listing agent, they aren’t just financially motivated to sell you the home, but they are also legally compelled to help the seller in every way. The seller is their client; you are not, and they have no duty towards you at all. What does this mean when you’re out and about searching for your next home?

If the listing agent hears you whisper to your partner about how much you love the home, or how much more you will be willing to pay, they must report this information to the seller. It doesn’t matter whether you meant them to overhear you or not; they can and will use this knowledge to help their client earn the maximum amount of money – at your expense, of course.

You will also be up against a skilled negotiator who knows the market inside and out. Mostly people don’t have the expertise to represent themselves in the fast-changing real estate environment.

Having a buyer’s agent means you have representation of your own. Now there’s an expert in your corner, who is motivated and legally bound to help you find the right house and, the right price, and the most ideal terms possible.

You want to be informed when buying GTA real estate, but you also want to make sure you’re focused on the right priorities. Learn more in Do Stats Matter When Buying or Selling Toronto Real Estate?

Overpaying for a House You Love

When buying a house without representation, overpaying may be the least of your worries. That said, it’s a big deal, especially with real estate prices as high as they are in the GTA. Not paying any more than you have to is imperative if you want to be able to comfortably afford your home.

Getting into the market at the lowest possible amount also allows you to grow more equity as values rise over time. However, a skilled listing agent with impeccable negotiating skills knows every trick in the book to get you to pay more than you should.

A buyer’s agent who represents you will protect you at all costs. They’ll work to negotiate the lowest price whenever possible. If not, they can advise you about whether you should increase your offer or move on to a new listing where you can stay within your budget.

Knowing all of your options will empower you to make the right choice. You can start by reviewing our available listings right here.

Buying the Wrong House

Overpaying for the right house is not ideal, but it’s nothing compared to getting the wrong house at any price. Imagine moving in only to discover it’s the wrong neighbourhood, or the house itself is not at all suitable.

Maybe it’s smaller than you realized, or there were problems you didn’t see coming. Or perhaps having only two bedrooms is a bigger issue than you anticipated. That open floor plan you wanted so badly means there’s no escape from the noise.

No matter how well you plan, it’s impossible to think of everything, especially when you’re not in the market every day. An experienced real estate agent who has helped countless buyers in the past will help you consider aspects of the home you wouldn’t have dreamed of on your own.

Getting ready to purchase your first home? Our first-time buyer series will help you navigate this exciting milestone:

Failing to Get the Best Terms

Ultimately, the question is not, can you buy directly from a listing agent; it’s should you? When you think of all of the benefits of working with a dedicated buying agent, it doesn’t make sense to proceed without expert representation. For example:

You may get the right house in your neighbourhood of choice. You may even get it at a great price, especially if market conditions are tilted in your favour. However, you may not get all the terms and conditions you would have if you had a skilled real estate agent to negotiate on your behalf.

It could be little things, like a more convenient closing date. Or you may be able to get more from your purchase, such as asking the seller to include the brand-new BBQ unit and patio furniture, having the property professionally cleaned or other inclusions. All of these may seem minor in comparison with the cost of your new home. However, everything adds up, and achieving the best possible terms can really enrich your entire buying experience.

Are you considering a home purchase in the GTA? I’m happy to guide you and help you make informed decisions throughout each step. You can get in touch at OMarjanovic@kw.com or call 647.620.2882 to begin a conversation.